How Often Do Credit Scores Change?
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Published on June 8, 2015 | Updated on July 13, 2015
Working to improve a poor credit score can feel like waiting for a bad haircut to grow out — if you look in the mirror too closely, you’ll be disappointed at how slowly change seems to occur. But a month can make a difference. The same goes with grooming your credit. Your credit score changes more quickly than you might first expect.
Your credit score depends on what’s on your credit report
To understand how often your credit score changes, the first thing to know is that it’s based on the information in your credit report. Your credit report is a detailed document that describes your history with handling borrowed money. This information is run through a credit scoring model (the most commonly used is the one developed by the Fair Isaac Corp. or FICO), and the model produces a score that represents the report.
Credit scores typically are calculated at the moment they’re requested by a lender, meaning the information on your credit report at a given moment is what will be reflected in your score. So to answer the question of how often your credit score changes, it’s important to know how often your credit report is updated.
Learn more about your FICO score with this NerdWallet resource
Lenders usually report your account information monthly
Generally, lenders send a report to the credit bureaus they work with once per month with your account information. There are three major credit bureaus in the United States: Experian, Equifax and TransUnion. Your lenders may report to all three, two out of three, just one or none at all. In most cases, big banks report to all three.
So what kind of information are lenders sending to the credit bureaus each month? This varies from bank to bank, but the data they’re reporting about you or your account may include:
- The timeliness of your last payment (that is, whether your payment was on time or
- Account status (good standing, closed, delinquent, defaulted, in collections, etc.)
- Account balance
- Authorized-user activity
- Recent credit inquiries
In the United States, lenders report both positive and negative credit information on roughly a monthly basis. This means that your credit score could change a bit each month, depending on the information that’s landing on your credit reports.
Big fluctuations could happen for a few key reasons
Most changes to your credit score happen incrementally — a few points gained or lost one month, a few more the next. Over time, this can add up to something big, but you’re unlikely to see a significant swing in a short time.
There are exceptions. Each of the following could cause a big fluctuation in your score (think 25 points or more) in one or two months:
A delinquency: Since payment history makes up 35% of your FICO score, it will pinch to have a significantly late one on your credit report. Falling behind on a bill payment, even for 30 days, could cause your score to take a serious hit.
If you fell behind with one of your accounts, do your best to get current as soon as you can. A 60-day delinquency is worse than a 30-day delinquency, and a 90-day delinquency is worse still, so it pays to get back into good standing quickly.
A change to your credit card debt load: Thirty percent of your FICO score comes from amounts owed, and your credit utilization ratio heavily influences this category. Since your credit utilization ratio is determined by the amounts you owe on your credit cards compared with your credit available, a sharp increase in your credit card debt could cause a precipitous drop in your score.
But the opposite is also true. If you get a big cash windfall and choose to use it to pay off your credit card debt, your credit utilization ratio will plunge. This could cause your FICO score to rise dramatically in just one month.
The resolution of a legal dispute: If a judge rules against you in certain types of civil cases involving money owed, the judgment will likely land on your credit report. You should expect a steep drop in your FICO score in the months immediately after the judgment is reported to the credit bureaus, and it could take up to seven years for this information to fall off of your credit report.
Your best course of action is to keep making on-time payments on your bills, keep your credit card debt low and pay off what the court says you owe as soon as you can. The effects of the judgment on your FICO score will diminish over time, and by staying on your best credit behavior, you’ll have an easier go of re-establishing your financial life.
Lindsay Konsko is a staff writer covering credit cards and consumer credit for NerdWallet . Follow her on Twitter @lkonsko and on Google+ .
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